First Midwest grows in stature with Bank Calumet

Itasca firm to buy bank for $307 million

First Midwest Bancorp Inc. is buying Bank Calumet Inc. for $307 million in cash, a deal that will give the Itasca-based acquirer its first branches in Northwest Indiana and a total of $8.7 billion in assets.

The two banks are a good fit, says Steve Shapiro, executive vice-president and corporate secretary at First Midwest. Headquartered in Hammond, Bank Calumet has $1.1 billion in assets and 29 branches in Indiana and Cook and Will Counties. It also has $850 million in trust assets, which will boost the $2.6 billion in trust assets currently managed by First Midwest.

The acquisition, which is expected to close in the second quarter of 2006, will give First Midwest a total of 80 branches across the Chicago region, ranking it sixth among area banks. It will also control $5.4 billion in deposits, 11th among area banks.

That increased mass makes First Midwest an attractive target for a super-regional bank looking to establish a foothold in the market -- if executives were inclined to sell.

They're not, says Mr. Shapiro. "We view ourselves as a very attractive acquirer for a lot of banks," he adds.

But that doesn't take First Midwest out of contention if consolidation sweeps Chicago's mid-sized banks, as some experts predict. "They've always wanted to be more of a consolidator," says investment banker Steven D. Hovde, of First Midwest. "But as they enhance their franchise, that doesn't detract from them being an ultimate seller," adds Mr. Hovde, who is president and CEO of Hovde Financial LLC.